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Newish LL asking about why tenants wants a three year rent period.

29-08-2018, 17:50 PM

Hi I wonder if anyone can help. I am renting out for the first time and a year has passed with the same tenants. They are a family with one small child. They are asking for an extension of their AST to now be for another three years or atleast another two years. Does anyone have any advice. Should I give this or should I just renew it for another year. What happens if they renew on a year by year basis on the AST with same tenants? Do tenants get more rights if they stay on one year renewals? I am worried that I will end up loosing the house to tenants. Does this happen?

Comment

Don't. Why not let the tenancy go periodic/become a rolling contract? This favours the landlord as if anything goes wrong you can bring the tenancy to an end relatively quickly. With a 1 or 2 year contract you are reliant on break clauses or waiting out the entire time.

Under current legislation the tenants do not get any more rights with continuously renewed tenancies. Save yourself the hassle and have a rolling contract - no paperwork necessary - apart from re-protect deposit etc.

Freedom at the point of zero............

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Comment

I am happy with the tenants. If I give them a yr contract I would be able to ask them to leave if they break the clause I.e don’t pay rent. Otherwise I dont have a reason to really ask them to leave do I?

Comment

Hi I wonder if anyone can help. I am renting out for the first time and a year has passed with the same tenants. They are a family with one small child. They are asking for an extension of their AST to now be for another three years or atleast another two years.

Does this happen?

Not in the real world.

For it to happen to a landlord 'renting out' for the first time seems highly unlikely.

Schools are getting wise to this and want to see proof that they are in fact resident at a permenant address in the catchment area.
eg. That they have not recently rented short term accomodation in the catchment area, and/or have a TA that at least covers the date when the child will start school.

Comment

Just hoping that we are not all forced into this three year contract !

No one can force you into anything.

When the current fixed term ends the tenancy will become a statutory periodic one (assuming the tenant doesn’t leave on the last day). From there it will roll month to month (assuming monthly rental periods) until one of you acts to end it.

If the tenant is suggesting a long fixed term then they probably want the security of knowing they have a roof over their heads for the next 2-3 years.

But it’s also likely is that the agent is suggesting this longer term. Many agents charge their commissions (even for renewals) as a percentage of the total rent of the fixed term. The longer the fixed term, the higher the fee.

I get why a lot of people on here only sign tenants for 6 months and then just have periodic contracts, but I see no issue in listening to the requests of a good tenant.

I’d be reluctant to sign anyone up for longer than a year at a time, but if granting another fixed term tenancy to a tenant who had an impeccable record with me so far prevents them from looking elsewhere, then it’s certainly worth considering.

Comment

I presume that you intend being in the business for the long term, so there is no prospect that you might plan to sell in the next 3-5 years (except for changes in your circumstances) and you would be happy for a good tenant to stay.

The existence of your agent comes into consideration. Are they managing the property for you, or was it just an introduction service?
What agent costs would you incur by agreeing a new tenancy with the tenants and when would you have to pay them?

I would suggest talking directly to the tenants (not via agent) to find out what they want from the tenancy and why,
You should also point out that if you were to agree to a long tenancy term, then they are legally obliged to pay the rent for that time even if circumstances change (e.g. job move to another part of the country, another child).

Explain to them that you intend letting the property long-term; be open and honest with them.

An alternative that I have come across, but never used is a "deed of assurance" promoted on the property118 web site. This essentially says "if the tenant complies with the terms of the tenancy agreement and the landlord uses S21 to remove them within a <agreed period> then the landlord will pay the tenant <agreed amount>". That should give tenants a reasonable assurance that you are in it for the long term whilst removing the need for a long tenancy that you might find difficult to end if your circumstances change.

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